Town Square

Chevron will move 800 jobs to Texas

San Ramon-based Chevron Corporation will move 800 jobs in the Bay area to Texas, the oil giant told employees on Thursday. The shift accounts for approximately one quarter of its headquarters staff and will take place over the next two years.

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Posted by TL Nelson
a resident of Danville
on Dec 21, 2012 at 11:59 am

Chevron's decision is just the tip of the iceberg. With among the highest property, sales, and income taxes in the nation and an obsessively over-regulated business environment, California will have an increasingly hard time attracting new businesses to the state and keeping existing ones from moving away.

Posted by JRM
a resident of Vista Grande Elementary School
on Dec 21, 2012 at 5:51 pm

Well, TL's negative view of the state of affairs in California is unfortunate and perhaps reflects his own professional experience. Haven't we all had our company access economies of scale out of state in the quest of quarter over quarter results? Get over it Dude, ask Facebook, Google and numerous medical device companies (Intuitive Surgical, Halt Medical to name some) that think this is the place to be. Think Positive! Why run down your state TL? You sound like a Detroit resident 20 years ago. If you work for Chevron, I am sure this is tough, but things happen. Move on and demonstrate emotional intelligence. Life is GOOD...we like it here!!

Posted by Citizen Paine
a resident of Danville
on Dec 22, 2012 at 10:38 am

I think TL's analysis is simplistic to the point of being just an(other) excuse to complain. sfgate's article on the move indicated that the jobs are being sent out for operational efficiency -- they really have always belonged in Houston, which is the epicenter, the Silicon Valley, of the oil patch.

If it was otherwise, like the business climate, I do not think that Chevron would've missed the opportunity to say so. In fact, their spokes-minion talked instead about the company's "commitment" to CA. Of course, a company is committed until it isn't, loyalty not being in the DNA of any publicly-held company (by definition), but they never mentioned CA's inhospitality.

Posted by Old Danvillian
a resident of Danville
on Dec 26, 2012 at 7:23 am

Chevron has demonstrated it's ability to focus on profits and costs. Remember how it moved from SF to San Ramon in the first place? Cost reduction was the driving factor. Moving to Texas will help keep employee costs lower by providing for lower living costs for its employees. Translation: more competitive in the energy market. California is a relatively high-cost place to operate and live. It's about cost control, pure and simple, no political agenda.

Posted by Dave Templeton
a resident of Danville
on Dec 26, 2012 at 7:56 am

TL is right on. I travel most of the time. When folks in the "free states" ask me about California politics, I say, "California is full of nuts, flakes and kooks. They vote for nuts, flakes and kooks". That's how we got into out present situation and the is absolutely nothing happening to change things. We will continue to lose good jobs, with no chance of replacing them. Why would a prudent businessman move to California or start a business here? We have great weather.....everything else is better in Texas and many other places.

TL's analysis may be simplistic, but it's accurate. I don't know about Dave, but I live here because I can't relocate (until I retire). When I moved here over 35 years ago, CA was business friendly, tops in education, and had reasonable taxation. It still has great weather and excellent cultural oportunities, but that's about all it has to recommend it today. Detroit died because the city and unions milked everything they could from big companies until Japan, Germany, and Korea took over the automotive industry.

Posted by Capt Charlie
a resident of Danville
on Dec 26, 2012 at 9:32 am

Hewlett Packard shut down a lab in Palo Alto due to the Cal OSHA ! No problem; moved the lab and staff to Colorado. Problem solved !
With 200,000 people leaving California ever year, I suggest Mexico make an offer for this state................

I agree with Dave. There are two kinds in California. Those who have lived here all their lives and don't know any better,or don't care, and those who moved here, witnessed the bizarro world first hand and can't wait to get out (like me). The weather is a golden anchor.

Posted by Tried and True
a resident of Danville
on Dec 26, 2012 at 1:38 pm

I'm a kook and a nut. So is my wife. I like being a kook and a nut. Perhaps others prefer living with the god-fearing socialist-hating antigay gun-toting redneck hillbillies one finds in other states. My kids enjoy other kooks and nuts at Stanford and UC Berkeley. Maybe they'd do better at Idaho State, I don't know. After all, that's where Sarah Palin attended. Heard they have a great nuclear physics lab in Boise that converts potato oil into rocket fuel.

For those who don't understand that larger CA businesses and job creators are moving non-location-specific jobs out of state as soon as they can with the least amount of internal disruption (or riots/lawsuits) are delusional and losing sight of the facts (yes, you JRM and Citizen Paine). Two of the largest CA health companies are moving non-care related corporate opps to Colorado & Arizona respectfully (I won't name them to protect my sources) and Chevron is clearly doing that with the recent re-orgs that moved/outsourced jobs to Manilla, Buenos Aires, and now Houston. I have worked at Chevron and so has my wife at different times that span from the 1990's into the 2010's. Neither of us were ever laid off or re-org'ed out, so this is not sour grapes in any way. It was always clear that Chevron is first and foremost an "energy company" where its IT operations (and most "downstream" opps) are an eyesore cost center to be downsized or moved to "least cost geographies"... Yes, that is a REAL term used internally. It all started back in the 2000's with the move from SF to San Ramon + Concord and then the re-orgs mentioned. There are ZERO incentives for these companies to operate here with the regulatory and tax situation in this State. If they could get a good price for the Richmond and El Segundo refineries (and release of liability), they would be GONE from CA within 18 months. Bet on it! Silicon Valley is fine and great for Tech/Biotech but for every Facebook on the grow, there are many more decliners like Yahoo! and Ebay trimming people + operations or that get acquired for cheap (Sun, 3Com, etc) and stripped down/assimilated. California is great for many things, but retaining or attracting Fortune 500 companies is NOT one of them.

Posted by JRM
a resident of Vista Grande Elementary School
on Dec 26, 2012 at 8:00 pm

Gee whiz...so glad we have "Matty" to explain all this to us who are "delusional" and "losing sight of the facts". Of course Chevron would love to bolt out of state ("with release of liability") as you so state, of course they would! Why not pollute the heck out the site and leave? Your company has the morals of a coal company putting a sludge pond above a small town on an unstable hillside and think that is just fine as long as they provided jobs along the way.
My point is this to you "nattering nabobs of negativity" as a disgraced Republican once said...go ahead and leave folks. If you view this state as a land of "nuts, flakes and kooks" indeed you should spend the rest of your precious few days on this earth in a place where you feel more comfortable with the demographics. I myself have lived in 6 different states in the course of my corporate career and find Danville to be my own personal garden spot. I'm sure I won't impact your overwhelmingly negative view of your community but indeed if "everything is better in Texas" than friggin go there and stop banging your high chair.

JRM - apparently you do need me to keep this discussion on topic... all my comments were to the topic, which you have a hard time sticking to...large companies in CA sending jobs and moving elsewhere is a FACT... I love Danville and the surrounding community as well...BUT THAT IS NOT THE POINT...read that again please.

I can still love living here and still know and recognize the economic facts of what is going on around me and in this State... I'm also a business owner and have seen that side of the issues. Despite your assumption, I'm not blindly defending Chevron's environmental record, but then again, the refinery there was built there BEFORE Richmond was even an official city and LONG before a large percentage of Richmond and the surrounding towns grew up around it....why did they grow up around it?!?!...because the jobs were THERE...and Chevron's property and other taxes funded other development...hmmmm and housing was cheap...wonder why?!?!?!... It has been there for OVER 100 YEARS and Chevron wouldn't otherwise consider selling it if the EPA and State authorities don't make it near impossible to operate, update, renovate, and innovate it. Some isolated incidents like this year's fire aside, Richmond residents always decrying the refineries (Chevron's is not the only one) even existing there is akin to the new homeowner along the 100+ year old golf course getting pissed off because golf balls keep breaking their windows... Really?!?!?! or others building homes in a flood plane wondering why they got flooded after a big storm or levee break... hmmm

If you can stay on topic, we'd like to hear your insights rather than "if you don't like it, just leave"... what are you, 12?

Posted by Tried and True
a resident of Danville
on Dec 26, 2012 at 10:28 pm

Some businesses leave, others stay, and others move in. These are FACTS. I have run the competing lemonade stand across the street from Matty's stand in Blackhawk for some years. Well he introduced corn dogs... and the rest is history. Now Texas leads the nation in lemonade stands, corn dog stands, and street taco stands. Need I say more? We CAN be as good a China. C'mon Cali, remove minimum wage and institute right to work laws. No workers, short of Chevron execs, deserve more than $5.00 per hour.

ps Let those turkeys who built in the way of Sandy eat their own shorts! No way taxpayers should have to pay such exorbinancies. Tea Party Lives!

All the right wing echoes who argue that California should compete in the race to the bottom along with Manilla, Buenos Aires and Houston have been drinking the Koolade just a bit too long. "When I moved here over 35 years ago, CA was business friendly, tops in education, and had reasonable taxation." That's true. But we cut the taxes (Prop. 13 in the 70's, Schwartzenegger's elimination of the vehicle registration fee which originated in the 1930's, etc.) with the result that public funding of education has been slashed. And those horrible "regulations" you folks fulminate about have made it so we can actually breath the air. I was here in the 60's and 70's before those nasty "regulations" were passed, and you could see what you were breathing (or, more likely, coughing.)

Oh, and the ignorance displayed by the comment that there are "200,000 people leaving California" -- ignoring the fact that 200,000 other people are moving here from other states at the same time -- is a classic example of "Fox News" worthy propaganda victimhood.

It's true - if you want to set up a minimum wage sweatshop you probably wouldn't choose California, all things being equal. You'd choose China, or Pakistan, or Sri Lanka. Do you folks really want to make California more like those places? Is that your dream state?

Huh? - not talking about "sweatshops" with low wage jobs, but major Fortune 500 employers with high paying jobs moving them or their entire operations out of state...or country in some cases. Other than the 2 MAJOR hospital systems I mentioned who are moving non-healthcare personnel across the Rockies and Chevron, there are many more examples... Lockheed only retains a few operations in CA (Palmdale, San Diego, at Sandia in Livermore, and a few smaller sites), when they used to be one of the largest employers in the State. Northrup as well...they moved their LA HQ to Virginia.... not to mention hundreds of small-to-medium sized businesses every year. Even the USOC left...

There needs to be BALANCE in taxation, regulation, permitting, insurance/workers comp, etc... None of that exists here.

Any amount of research will prove the exodus is speeding up... some examples...

Posted by jrm
a resident of Vista Grande Elementary School
on Dec 27, 2012 at 3:10 pm

Yes Matty, I am 12....just old enough to be amused by maladjusted ex Chevron employees living in Blackhawk lecturing us all about how our state is going to hell in a handbasket. I hope your business has a prosperous 2013...oh but on second thought that would defeat your whole dismal hypothesis now wouldn't it?

Matty, no one wins a race to the bottom - and don't kid yourself, that's exactly what you're pushing. Giving companies a license to pollute without consequences or restrictions, ignore workplace safety and underpay their employees hurts us all in the long run. Companies will locate where they have customers and clients to do business with - customers and clients who want to live here and have money to spend, that is. Lower wages and more pollution are not the key to long-term economic health for California.

The blatant propaganda pushed by companies' mouthpieces (specifically including the editorial page of the Wall Street Journal, which lost any semblance of credibility years ago) is designed to advance their short-term interests, not ours. New companies start up in California every day. California has higher per capita income and sends more tax dollars to DC than we get back in federal spending, unlike the Red states you tout. There's a reason for that.

Man, you guys are obtuse...did I say do away with ALL regulations, taxes, etc... no.. I clearly said BALANCE... CA is absolutely UNBALANCED toward corporations in these areas and the proof is all there regardless of which publications and sources you choose to accept or reject.

How is my endorsement of relocated companies that used to provide thousands of engineering and other white collar/college educated jobs in this state promoting a race to the bottom? That is just ludicrous. Maladjusted, JRM? Hardly...INFORMED. You have not provided ANY cogent arguments or facts to your positions...just pontificating opinion about where you prefer to live... again, NOT THE TOPIC.

And while others in this thread did, I did NOT promote other states...merely presented facts on where companies are moving... and , Huh?, YOUR fact about per capita income is a red herring. Using 2011 numbers, CA is only 10th in the nation but WA, MN, UT, CO, WY are only different by LESS THAN $2K per person...and the costs of living in those states are radically lower. (I know, JRM, you are just begging to say again, then why don't you just move there, Matty). No, we need to FIX CA, instead of continuing with collective heads in the sand.

Posted by Sylence Dugood
a resident of Danville
on Dec 27, 2012 at 11:26 pm

Matty,

While I do believe that your heart is in the right place relative to the endorsement of sustaining 'old world' engineering jobs such as those from the defense sector and the like, your head is not likely accepting the change that has occurred in front of us all.

I was blessed to start in the defense industry as a young engineer working for a subcontractor to companies that you have highlighted in your prior posts. In those days, many of us looked to those roles as lifetime appointments to learn, grow, serve, etc. till it was time for retirement. Nothing could be farther from that truth for today's engineers and scientists.

Their definition of a great job today is one with a start-up that has 21st-century pizazz, a perceivable social impact for the fruits of their labor and life-changing financial opportunity. Yes, an argument can be made that the 'kids' currently living 4-8 to a one or two bedroom flat writing code for an iPhone app in the Mission District will eventually grow-up and desire a 4,800 square-foot retreat in the East Bay. However, we all must respect that notion as an assumption on our part based on our own experiences and desires. That given, how many of us chose to live out all of our working years and then some in the same 3-bedroom, 1-bath, paid-off home that our parent's did based on their experiences and desires?

California is still the preeminent area for this kind of explosive opportunity. Without question, the Minneapolis-St. Paul twin-cities region as well as the greater Boston area are strong competitors for engineering and technical talent. Yes, we see the same cultivation occurring in regions outside of country, as well. However, to not see California as a sustainable engine for this century's engineering challenges would be incredibly misguided. Need proof, follow the money (Web Link). It always points back to causality regardless of effect.

At the end of the day, I've at least presented a few rational considerations for the notion that while the jobs we see emerging in CA may not at all be 'right' and desirable for 'us' (used loosely), they are the good jobs of this era for the motivated and innovative 'kids' around us.

Sylence - I appreciate your post, but I'm not oblivious to the way the "old world" jobs are changing. I was a 1099 by choice for 17 years after leaving Chevron while creating/working at software startups and consulting, and just became a W2 at another. But that world is clearly not for everyone...certainly not a majority of college grads. The bottom line is that Chevron (and in your case a DefCon) gave me the training and real-world experience after college to boldly go where few were willing to go. Most of my colleagues stayed at Chevron or ultimately ended up at "stable" places like Oracle, KP, etc. It is a very small percentage who will (and who did) brave the entrepreneurial waters...especially right out of school..unless they come from money and have that safety net in case of failure. As noted, Chevron ITC is moving jobs and is not hiring from colleges. It is essential to have the Chevron's, Kaisers, PG&E's, AT&T's, Lockheeds, Northrops, etc as stable entry-level job opportunities and training grounds for future business leaders developed internally or by eventually leaving those companies and doing it on their own. VC/Angel money will not be as easy to come by as it was in the 90's, and it is more difficult to start up in CA than it is in other states... yes, there is incredible web 2.0/3.0 talent here, but it is such a small part of the job picture. I have several neighbors with kids graduating with solid degrees from excellent schools in the last 2-3 years that still don't have jobs... My company had over 100 inquiries for an entry-level marketing spot and about 75 for a sales spot in the last few months. The opportunities are few and getting fewer in the aggregate. The data cannot be any clearer...

Posted by Sylence Dugood
a resident of Danville
on Dec 28, 2012 at 9:49 am

So Matty - you and I are dinosaurs by today's standards and likely proud of it. We came into a working world shaped by our fathers and the outcomes of WWII. That can surely not be debated as opinion but rather fact. I'll beg your understanding when I imply for sake of discussion that you and I would ascribe to the same desirable development pathway for tomorrow's leaders (e.g. get your Eagle Scout award, go to a good school, work for a Fortune 500 to pay your dues in your mid-20s, return to grad school for a professional degree, return to a Fortune 100 as a entry-level mid-manager in your early-30s and then make your best effort to ascend to the top, etc.). By trend, this path served our generation well but, at least in my opinion, is not the prevailing wind that is filling the sails of today's most notable innovators. Yes, this is a generality. Yes, there are surely many exceptions.

I too am not blind to the terrible conditions that present to many of our peers and our adult children. We are in a recession where the fruits of labors in the 80s (JIT, TQM, Six Sigma efficiencies, workplace automation, etc.) have come full circle. One no longer needs a team of engineers to maintain a process. Rather you hire 1099s (your nomenclature) to tell you what you need, implement what you need and validate what you need before handing over accountability to a skeleton crew (my nomenclature) of sustaining engineers.

As for Chevron moving a number of positions to the greater Houston area, I tend to believe that it likely makes sense for them to have those roles there. I still consult in the Houston area on a routine basis (not petrochemical) and can clearly appreciate what the 3rd-Bay Area represents to the oil/energy industry. I would tend to think that this is no different then IC designers & developers clustering in the South Bay as opposed to around what's left of Bell Labs in Murray, NJ. All stated, this is a lay opinion as I've not been inside the hallowed halls of one of John Rockefeller's spin-offs and will accept your critique if you see this as hogwash.

That’s one thing I like about living in Danville. Most of the houses are ugly, but they’re hidden behind bushes & trees & whatnot so you don’t have to look at them.

Chevron gets taxed differently than other California companies, to its disadvantage. In 2009, California finally realized that they were chasing jobs away by taxing companies based on the payroll, property, and sales in the state, so they changed the law so now they tax companies based on California sales only. But that law change doesn’t apply to oil companies like Chevron. They’re still taxed based on payroll, property, and sales in the state. So Chevron has a tax incentive to move payroll out of the state. I would expect Chevron to continue the trend of moving jobs out of state.

My next door neighbors are geophysicists. Both work for Chevron and will be moved to Houston. They’re good people who contribute a lot to the community. Sad to see them go. I understand these 800 jobs that are moving pay well. That’s too bad. No doubt that will affect Danville businesses.

Sylence - while I did enter the workforce with that agenda and mindset in the late 80's/early 90's, I quickly adjusted due to how my father was treated late in his Corp career coupled with the prevailing winds in 1995 to go out and do my own thing with no intent on returning to big Corp. My wife did the same, consulted back to big Corps for years, and has returned full circle as an employee. So I guess we are semi-evolved dinosaurs in our mid-40's... We've lived both sides of the employee/entrepreneur fence and are qualified to see and recognize the crunch being applied to both scenarios in CA over and above what is happening at the Fed level. We are going in the wrong direction as a State (and country) and one generation from now, only the very rich will even be able to afford 4-year colleges for their kids so they can even qualify for high tech/high pay jobs that will predominantly be located in other states. The vicious cycle in this regard has only begun...

Posted by Sylence Dugood
a resident of Danville
on Dec 30, 2012 at 2:28 am

Matty,

I can understand and appreciate your points. I cannot definitively state that your prognosis for what may occur in a generation or so is wrong. I suspect that you would also acknowledge that it's a well-intended best guess as well. That stated, let's look back for just a moment to see if we might glean useful from past experiences as the world unfolds tomorrow.

While always debatable, most consider the gilded age of contemporary innovation and inspiration to be the mid-70s to the early to mid-90s in this state. Again, agree or disagree, please bear with me. Whether it was Noyce and Moore at Intel or Jobs and Wozniak as emergent tech savvy entrepreneurs at Apple as well as established corporate tech titans, Bill Hewlett (CEO till the late 70s) and Dave Packard (stayed on as COB till the early 90s), they predominately chose CA to grow and sustain their organizations. The same is clearly evident for the big defense firms that established their foothold in this state much earlier. The question is why?

I believe it was because of this state's prized university system (all tiers from Private, UC, CSU and JC) and the secondary / primary education afforded to most through our public school system to produce highly qualified, workplace ready individuals at a relatively modest cost (i.e. highly subsidized) - certainly in comparison to today. On a personal note, I consider myself privileged to have been one of those students. Where did this prized university system arise?

To answer, most will accredit Pat Brown, Sr. (Gov. from '59 to '67) as the principal architect and administrator of the state's 'Master Plan'. During his tenure, I believe that at least 4 CSU and 3 UC campuses opened. Where did he get the funding, in general? Most consider this state's greatest revenue generators after WWII and till perhaps the mid-90s was aerospace and agriculture. Right or wrong for the sake of discussion, we move on.

In a time when Federal tax rates for the top tier earners where 70% or greater (Kennedy rates), cap gains rates were on the order of 28% or so, and there was no Prop 13 to constrain property rates and overall tax burden on both companies and individuals alike which afforded our K-12 institutions relatively abundant budgets, we had growth, innovation, nearly unbridled capitalism and, yes, very modest tuition costs at renowned universities.

So what gives in today's environment that wasn't in existence then? Nearly worthless question with a million dollar answer. In my own opinion, I like to believe that the Cold War was capitalism's best friend for almost five decades ('46 to ~'92). The billions on billions that poured from Federal coffers into this state would have been labeled criminal if they were not first considered patriotic. The closing of a vast array of pre-WWII military bases across the entire state left whole communities reeling. It wasn't that long ago when AT&T (post break-up no less) still ran many of our National Lab's for $1 USD as a service to the Federal government on a past commitment to President Eisenhower. It is inconceivable that any organization could do this today.

I've surely not offered a useful answer to the question i've poised that gets at the 'vicious cycle' you highlighted. Sadly, perhaps what we need is another all consuming Cold War with an evil red state, etc. that will afford everyone's child a relatively inexpensive college education and a great job afterwards. I emphasize sadly...

Sylence - many of the items you list (primarily Prop 13 and everyone's fear to touch it) and I'll offer the misuse of general fund/allegedly earmarked lottery moneys have had a large hand in the EDU crisis here...K-12 and college. Unfortunately, we didn't call current Gov Brown's bluff on Prop 30 (hint...I was vehemently opposed) while simultaneously funding SRVUSD levy/parcel taxes (I was strongly for). At least K-12 here in SR/DAN/Alamo/Diablo should be fine for the near future... Unfortunately, I foresee more "degrees" and tech certs coming out of the ITT's and Universities of Phoenix (not bashing, but clearly NOT the same education) from sharp CA kids who should be at a 4-year UC/CSU school but cannot otherwise afford it...

Sylence:
I believe we do have an all consuming cold war. I (and many others) refer to it as the PPWT (Perpetual Phony War on Terror), or as inCurious George used to call it, "Gittin' them evil-doer's".